By January 2000, the people had become irreversibly impatient with Mahuad. Figures had shown that the country's economy had shrunk by seven percent the previous year, while inflation was running higher than sixty percent and the sucre had devalued by almost three hundred percent in twelve months. Calls for resignation grew stronger by the day, and in a desperate bid to save his presidency, Mahuad announced the resignation of his entire Cabinet and declared his intention to adopt the US dollar as the national currency.

 

For Ecuador's indigenous people, making up almost half of the country's 12.5 million population, dollarization was the final straw. They saw it as a system that would favour the banks and recently privatized services at the expense of the poor, who would have to meet rising consumer prices with ever-dwindling wages. With eighty percent of their numbers defined as living in poverty, they firmly believed they were being made to bear the brunt of the nation's economic woes.

CONAIE began to mobilize its supporters, and tens of thousands of indígena s filtered into Quito under the noses of troops posted at checkpoints to stop them. They demonstrated around the city, their numbers quickly swelling with large followings of other disaffected people. After a week of demonstrations, even the soldiers had started to join them and on January 21, 2000, the military unit guarding Congress stepped aside allowing the indigenous groups to storm the building. The activists announced the removal of Mahuad, the dissolution of Congress and the Supreme Court, and proclaimed the formation of the " Junta of National Salvation ", composed of Antonio Vargas, the leader of CONAIE, Carlos Solórzano, a former Supreme Court chief justice, and Colonel Lucio Gutiérrez, one of the many mid-ranking officers who had joined the rebellion.

Before long the military top brass followed course, urging the president to resign, while General Carlos Mendoza, chief of the armed forces joint command, talked his way in to replacing Gutiérrez on the governing "triumvirate". Only hours later, however, Mendoza resigned from the junta and called for Gustavo Noboa , the vice-president, to take up the presidency. When Congress reconvened, they saw this as the most constitutional way to defuse the insurrection, ruling that Mahuad - who was still defying calls to resign - had abandoned his office, and voting Noboa in as president. On January 26, Noboa was sworn in, the country's sixth president in only four years. Believing that the US had put pressure on Mendoza, CONAIE claimed that they had been betrayed by the military, but said they would organize another uprising if Noboa couldn't extricate the country from its financial tangle quickly.

Noboa immediately made it clear that he was to press ahead with the dollarization plans, and in March the legislation was passed through Congress to replace the sucre with the US dollar. In May and June, there were more strikes and demonstrations, most notably from teachers, who stayed away from school for seven weeks before a pay increase was agreed with the government.

Although around three-quarters of Ecuadorians oppose dollarization, the policy has led to a US$2 billion aid package from a group of international financial institutions, which will not only help its implementation, but will be used to shore up the fragile banking system and for welfare programmes for the poor.

As for the players in the January coup, the administration opted for a policy of leniency: over seventy military officers were arrested and given prison sentences of just a few days, while a further 113 soldiers who were involved were granted amnesty by Congress. But the government is seeking to prosecute a number of banking officials accused of misusing public funds during the crisis of March 1999. In a surprise development in July, the Supreme Court sought the arrest of Mahuad and his former finance minister, Ana Lucia Armijos - though neither were in Ecuador at the time - on the grounds that they acted beyond their constitutional powers when they ordered the freezing of private bank deposits during the same crisis.

The dollarization process is forging ahead, though it's too early to say whether or not it will lift the country out of its economic quagmire. The public may be generally disapproving of the scheme, but are willing to give it and the new president a fair go - for the time being at leas